An aerial view shows the central business district in Nigeria's commercial capital of Lagos.

FirstRand could spend more than $300 million (R2.7 billion) to buy a retail and commercial bank in Nigeria to expand in Africa's top oil producer, the head of South Africa's second-largest lender said on Tuesday.

FirstRand last week was awarded an investment banking licence in Nigeria, giving it entry into the continent's most populous country.

But its investment banking arm, Rand Merchant Bank, will likely need local funds to help finance deals there, FirstRand Chief Executive Sizwe Nxasana said.

“At the moment we have a dollar balance sheet, but pretty soon we're going to build a naira balance sheet,” he told Reuters in an interview.

“One of the things that we are looking at is to still get into the retail and commercial banking space to be able to tap into... deposits in the country.”

FirstRand last year ended talks to buy a majority stake in Nigeria's Sterling Bank after failing to agree on a price.

Nxasana said FirstRand had been looking to spend around $300 million on that deal, but may need more for an acquisition now.

“Probably more than that - just given the size of what we may be looking at this stage,” he said.

He declined to give an exact figure, but said FirstRand was looking at a “couple of options” including some of the banks that are owned by the state-backed “bad bank” AMCON.

Nigeria bailed out nine banks following its 2009 banking crisis. Three of those were later nationalised and are controlled by AMCON, which has since cleaned up their balance sheets and is looking for new investors.

The three have been renamed and are now called Mainstreet Bank, Enterprise Bank and Keystone Bank.

Nxasana said FirstRand was on a recruitment drive in Nigeria, but would not hire more than 50 bankers at the start of its growth from just a representative office.

“As we grow the business and do work there we're going to be adding to those people,” he said. - Reuters